Energy Intensive Users Group
British Ceramic Confederation
Chemical Industries Association
Mineral Products Association
Major Energy Users Council
UK Steel
British Glass Manufacturers Confederation
EnergyQuote
Confederation of Paper Industries
Alcan; Anglesey Aluminium
BOC; Air Products
Jeremy Nicholson
Director – Energy Intensive Users Group
[email protected]
www.eiug.org.uk
International Federation of Industrial Energy Consumers
Avenue Louise 200, B 1050 Brussels
www.ifieceurope.org
JN (EIUG) - Ceramics, Stoke on Trent 14th October 2010
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Context :
• c.12 GW oil & coal fired capacity to be retired by 2016 (LCPD)
• c.7GW nuclear capacity to retire by 2018 (absent AGR life extension)
• Concern over gas import security (UK c.70% import dependent by 2020)
• Major investment required in energy supply chain (c.£200bn by 2020)
• UK committed to at least 34% reduction in ghg emissions by 2018-22
• EU renewable target: 15% UK energy by 2020
Implies >30% electricity – mostly wind (intermittency issues)
• UK aspiration for 40% low carbon electricity by 2020
• Political resistance to new coal absent CCS (still at demonstration stage)
Key concern to consumers:
need to maintain secure, competitive/affordable power supplies
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Gas Sources – growing import dependency:
Source: National Grid TBE 2008 (Base Case)
140
bcm per year
120
UK CS
Belgium / Netherlands
LNG
Norway
100
80
Dependent on
access
arrangements and
pre-contracting
60
40
20
0
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
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Gas Storage – not nearly enough:
Storage
Capacity
% Annual
Demand
Germany
19%
Italy
16%
France
24%
UK
4%
EU 25
13%
North America
20%
Source: International Energy Agency –
date unclear (pre 2006)
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Gas Forward Prices: UK, US, European (oil indexed)
65
60
p/therm
55
50
UK
45
Russia to Europe
(oil indexed)
US
40
35
30
25
Oct-10 Feb-11 Jun-11 Oct-11 Feb-12 Jun-12 Oct-12
Wholesale Gas Prices: UK (NBP) / EU (oil-indexed) / US (Henry Hub)
Source: EPSL, 2 September 2010
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Forward Wholesale Gas Prices: Summer & Winter 2010-16
UK NBP Offer - p/therm
Source: Spectron 21 September 2010
80
70
60
50
40
30
S 10 W 10 S 11 W 11 S 12 W 12 S 13 W 13 S 14 W 14 S 15 W 15 S 16 W 16
JN (EIUG) - Ceramics, Stoke on Trent 14th October 2010
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K
27
U
45
EU
ul
B
m
g
C
ze ari
ch a
R
D ep.
en
m
G ark
er
m
an
Es y
to
ni
Ire a
la
nd
Sp
ai
G n
re
ec
Fr e
an
ce
Ita
ly
C
yp
ru
s
La
Li tvia
t
Lu hua
xe
n
m ia
bo
ur
H
un g
ga
ry
M
N
a
et
he lta
rla
nd
s
A
us
tr
i
Po a
la
Po nd
rt
u
R gal
om
an
ia
Sl
ov
en
ia
Sl
ov
ak
Fi ia
nl
an
Sw d
ed
en
iu
el
g
B
50
EU Renewables
(%)
40
35
2005 Energy Share
2020 Energy Target
30
25
20
15
10
5
0
15
13.7
Growth required to meet
EU Renewable Targets
13.1 13.0 12.9
12.2
11.8 11.6
11.5
(as % total energy, 2005 to 2020)
10.8 10.7
10.5
10
Source: European Commission
10.1 10.1 10.0
9.7
9.5
9.3 9.2
9.0
8.7
8.0
7.8
7.3
7.1
7.0
6.9
6.6
6.2
5
It
he aly
rla
nd
s
EU
2
B
el 7
gi
um
A
us
t
Po ria
rt
ug
al
C
yp
Lu
ru
xe
s
m
bo
ur
g
M
al
t
Fr a
an
c
Fi e
nl
an
G d
re
e
Sw ce
ed
Sl en
ov
en
i
H
un a
g
Li ary
th
ua
ni
Po a
la
Sl nd
ov
ak
ia
La
tv
Es ia
to
C
n
ze
ch ia
R
ep
B
ul .
ga
ri
R
om a
an
ia
et
N
la
n
er d
m
an
y
G
Ire
m
ar
k
in
D
en
Sp
a
U
K
0
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Source Data: Eurostat 2006
Other renewables
100
Note:
Data on production of hydro plants larger
than 10 MW in Switzerland was not
available from Eurostat, however several
large-scale hydro plants (>10MW) do
exist
95
90
80
Indicative targets 2010
75
70
65
60
55
50
45
40
35
30
25
20
15
10
5
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Malta
Cyprus
Estonia
Poland
Luxembourg
Lithuania
Hungary
Belgium
United Kingdom
Czech Republic
Netherlands
Ireland
Bulgaria
Germany
Greece
France
Italy
Slovakia
Spain
Finland
Slovenia
Turkey
Denmark
Portugal
Romania
Latvia
Switzerland
Sweden
Austria
Norway
Iceland
EU-27
0
EEA
Share of renewable electricity (%)
85
Large hydro
UK Renewable Energy Strategy: Consultation Document
Chapter 10 - Wider impacts - Page 231-2:
10.5.3. On the industrial side, for an average medium-sized consumer, the
RO, EU ETS & CCL together contribute around 21% to industrial electricity
bills and about 4% to gas bills.
10.5.7 Our existing climate change policies are projected to add around
18% to annual domestic electricity bills and around 55% to industrial
electricity bills by 2020
Additional impact of Renewable Energy Strategy measures by 2020:
Table 10.1 Industrial Electricity Bills:
Table 10.2 Industrial Gas Bills:
10 to 16%
24 to 49%
(NB impact on household bills will be around half this level)
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CIVITAS Report:
“British energy policy
and the threat to
manufacturing industry”
Ruth Lea and Jeremy Nicholson
Online Report: April 2010
http://www.civitas.org.uk/pdf/EnergyPolicyApril2010.pdf
Parliamentary Group for Energy Studies: 23rd November
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UK's National Renewable Energy Plan (1)
As submitted to European Commission 30 June 2020
http://ec.europa.eu/energy/renewables/transparency_platform/doc/national_renewable_energy_action_plan_uk_en.pdf
Table 1: Expected gross final energy consumption of the UK in heating and cooling,
electricity and transport up to 2020 taking into account the effects of energy efficiency
and energy saving measures 2010 – 2020 (ktoe)
2005
Base
Year
Heating and
cooling
66900
2010
reference
scenario
60000
2020
additional
energy
efficiency
additional
energy
efficiency
reference
scenario
60000
54800
51500
Table 6 - Estimated share of renewable energy in the building sector (%)
Residential
Commercial / Public
Industrial
Total
2005
*
*
*
2000
*
*
*
JN (EIUG) - Ceramics, Stoke on Trent 14th October 2010
2015
1
3
2
2
2020
4
12
9
8
12
UK's National Renewable Energy Plan (2)
As submitted to European Commission 30 June 2020
http://ec.europa.eu/energy/renewables/transparency_platform/doc/national_renewable_energy_action_plan_uk_en.pdf
Table 10: Estimation of total contribution (installed capacity, gross electricity generation) expected from each
renewable energy technology in the UK to meet the binding 2020 targets and the indicative interim trajectory for
the shares of energy from renewable resources in electricity 2010-2014
2005
MW
PV
Wind - Onshore
Wind - Offshore
2010
GWh
11
1,351
214
8
2,501
403
MW
50
4,040
1,390
2020
GWh
40
9,520
4,630
JN (EIUG) - Ceramics, Stoke on Trent 14th October 2010
MW
2,680
14,890
12,990
GWh
2,240
34,150
44,120
13
Generation By Fuel Type (table)
Current
Generating Plant
CCGT
OCGT
OIL
COAL
NUCLEAR
WIND
PS
NPSHYD
OTHER
Interconnectors
INTFR
INTIRL
TOTAL
MW
20895
0
1395
24684
5114
378
347
351
0
MW
0
16
53180
%age
39.3%
0.0%
2.6%
46.4%
9.6%
0.7%
0.7%
0.7%
0.0%
%age
0.0%
0.0%
100%
Last Half Hour
(12:30-13:00)
Last 24 Hours
(13:00-13:00)
MW
20879
0
1433
24649
5117
389
412
370
0
MW
0
16
53265
MWh
460744
1401
18919
547220
121898
6023
14841
9537
0
MWh
2658
129
1183371
%age
39.2%
0.0%
2.7%
46.3%
9.6%
0.7%
0.8%
0.7%
0.0%
%age
0.0%
0.0%
100%
%age
38.9%
0.1%
1.6%
46.2%
10.3%
0.5%
1.3%
0.8%
0.0%
%age
0.2%
0.0%
100%
Data last updated:2009-01-06 13:25:00 (GMT)
www.bmreports.com/bsp_home.htm
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Managing intermittency – implications for reserve
(backup generation)
6,000
STORR (MW)
5,000
4,000
Source: National Grid ‘Future System
Operations’ February 2009
‘Gone Green’ scenario overview – potential
opportunities for reserve providers
3,000
2,000
1,000
0
2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21
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Citigroup Global Markets
3 February 2010
'The extraordinary investment levels identified by Ofgem – £200bn over 10 years
– is driven by the UK’s commitment to the renewable energy target. We fully
agree with Ofgem’s cost assessment. The UK power and gas utilities are
currently investing around £7bn per year, so will need to increase that investment
rate to £20bn per annum – that is 2 London Olympics every year!'
'without the environmental targets, we calculate that the UK would need to invest
only between £30-40bn in new power generation assets to replace and renew
plant that is coming to the end of its engineering life and secure reliable
generation and gas supplies‘
‘in our view, bills will need to rise by around 100% if £200bn of new assets are
really to be built. But the consumer is guaranteed one thing. The UK seems to be
setting out to create an electricity system that is substantially more expensive,
less efficient, and less robust than the current system’
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Offshore wind levelised costs
projections (mid 2020s)
210
190
170
150
£/MWh
130
110
90
70
50
2009 Base case
Worst case
Best guess
Best case
UK ERC - Great expectations: The cost of offshore wind in UK waters - September 2010
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WWA Report for EIUG & TUC, July 2010:
“The Cumulative Impact of Climate Change Policies on UK Energy
Intensive Industries – Are Policies Effectively Focussed?”
EIUG / TUC presentation to Parliament: 9th November
www.eiug.org.uk
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